Expensive 'Zero Unemployment Territory' Plan Demonstrates Local Benefits, Says Court of Auditors
Zero Long-Term Unemployment Territory (ZLTUT) is a costly yet proven effective initiative, according to the Court of Auditors as reported on June 19. Established by law in 2016, this experiment empowers regions to create companies dedicated to employing the long-term unemployed.
As of end-2024, the program covers 83 regions and 3,290 long-term jobless individuals. However, initial estimates that the money raised would offset the yearly cost of unemployment benefits have proved incorrect. The scheme costs roughly 28,000 euros annually for each full-time equivalent employee (FTE).
Financial and human resources are both crucial aspects of the ZLTUT. High costs are associated with employment creation, administration, and ongoing expenses. For employees, human resource costs entail recruitment, training, and assistance for workers who have often been out of the workforce for extended periods.
The experiment's management is atypical, with oversight given to an association managing the territorial experimentation fund. State administrations have minimal involvement. The Court of Auditors advocates that management of the concerned funds should be passed to a conventionally structured employment policy rather than an association.
Despite its expense, the ZLTUT is creating opportunities for the long-term unemployed and showcasing positive results in reducing long-term unemployment. Yet, the fear of uncertainties looms as further decisions regarding the scheme's future must be made before the deadline of June 30, 2026.
The ZLTUT, despite its high costs, is generating opportunities for long-term unemployed individuals, leading to positive results in reducing long-term unemployment. Financial concerns are paramount, as the annual cost for each full-time equivalent employee in the scheme amounts to approximately 28,000 euros. On the political front, debates persist over the future of the program, with decisions needed by June 30, 2026. In light of the finance ministry's scrutiny and the Court of Auditor's suggestions, discussions surrounding management structure, such as transferring the management of funds from an association to a conventionally structured employment policy, are also gaining traction in the world of business and general news.
